Federal Trade Commission
For The Consumer
Secured Credit Card Marketing Scams
Ads like this may appeal to you if you have
a poor credit history or no credit at all.
Beware: while secured credit cards can be an
effective way to build or re-establish your credit
history, some marketers of secured cards make
deceptive advertising claims to entice you to
respond to their ads.
Secured and unsecured cards can be used to pay
for goods and services. However, a secured card
requires you to open and maintain a savings
account as security for your line of credit; an
unsecured card does not.
The required savings deposit for a secured
card may range from a few hundred to several
thousand dollars. Your credit line is a percentage of
your deposit, typically 50 to 100 percent. Usually, a
bank will pay interest on your deposit. In addition,
you also may have to pay application and processing
fees—sometimes totaling hundreds of dollars. Before
you apply, be sure to ask what the total fees are and
whether they will be refunded if you’re denied a card.
Typically, a secured card requires an annual fee and
has a higher interest rate than an unsecured card.
Deceptive Ads and Scams
The Federal Trade Commission (FTC) has taken
action against companies that deceptively advertise
major credit cards through television, newspapers,
and postcards. The ads may offer unsecured credit
cards, secured credit cards, or not specify a card type.
The ads usually lead you to believe you can get a card
simply by calling the number listed. Sometimes the
number is not toll-free. A ‘900’ number service, for
which you are billed just for making the call, may
instruct you to give your name and address to receive
a credit application, or give you a list of banks
offering secured cards. It also may tell you to call
another ‘900’ number—at an additional charge—for
Deceptive ads often leave out important